View of Foregoing, It Is Suggested That (A)
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National Electric Power Regulatory Authority Islamic Republic of Pakistan NEPRA Tower, Attaturk Avenue (East), G-511, Islamabad Ph: +92-51-9206500, Fax: +92-51-2600026 Registrar Web: www.nepra.org.pk, E-mail: registrar©nepra.org.pk No. NEPRAJR/DL/LAG-465/ 9/27-6 September 09, 2020 Mr. Farman Ahmed Khan Lodhi, Chief Executive Officer, Solis Bravo Energy (Private) Limited, 3rd Floor, Horizon Vista, Block-4, Clifton, Karachi. Subject: Grant of Generation Licence No. SGC/143/2020 Licence Application No. LAG-465 Solis Bravo Energy (Private) Limited (SBEPL) Reference: SBEPL 's application submitted vide letter dated September 13, 2019. Enclosed please find herewith Generation Licence No. SGC/143/2020 granted by National Electric Power Regulatory Authority (NEPRA) to Solis Bravo Energy (Private) Limited (SBEPL) for its 05.00 MW Solar Power Plant located at Lahore, Chunian & Okara Cantonment, in the Province of Punjab, pursuant to Section 14B of the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997/Amendment Act, 2018. Further, the determination of the Authority in the subject matter is also attached. 2. Please quote above mentioned Generatioi 'cence No. for future correspondence. Enclosure: As Above (Syed Safeer Hussain) Copy to: 1. Secretary, Ministry of Energy, Power Division, A-Block, Pak Secretariat, Islamabad. 2. Chief Executive Officer, Alternative Energy Development Board (AEDB), 2'" Floor, OPF Building, G-5/2, Islamabad. 3. Chief Executive Officer, CPPA-G, ENERCON Building, Sector G-5/2, Islamabad. 4. Managing Director, NTDC, 414-WAPDA House, Lahore. 5. Chief Executive Officer, Lahore Electric Supply Company Limited, 22-A, Queens Road, Lahore. 6. Director General, Environmental Protection Department, Government of Punjab, National Hockey Stadium, Ferozpur Road, Lahore National Electric Power Reciulatory Authority (NEPRA) Determination of the Authority in the Matter of Application of Solis Bravo Enerqv (Private) Limited for the Grant of Generation Licence September0l 2020 Case No. LAG-465 (A). Filinq of Application (i). Solis Bravo Energy (Private) Limited (SBEPL) submitted an application on September 16, 2019 for the grant of generation licence in terms of Section-14B of Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (the "NEPRA Act") read with the relevant provisions of the NEPRA Licensing (Application and Modification Procedure) Regulations, 1999 (the "Licensing Regulations"). (ii). The Registrar examined the submitted application and found that same in compliance with the Licensing Regulations. Accordingly, the Registrar submitted the application for the consideration of the Authority to decide the admission of the application or otherwise. The Authority considered the matter and found the form and content of the application in substantial compliance with Regulation-3 of the Licensing Regulations. (iii). Accordingly, the Authority admitted the application on October 25, 2019 for consideration of the grant of the generation licence as stipulated in Regulation-7 of the Licensing Regulations. The Authority approved an advertisement to invite comments of general public, interested and affected persons in the matter as stipulated in Regulation-8 of the Licensing Regulations. Accordingly, notices were published in one (01) Urdu and one (01) English newspapers on October 30, 2019. Page 1 of 15 (iv). In addition to the above, the Authority also approved a list of stakeholders for seeking their comments for its assistance in the matter in terms of Regulation-9(2) of the Licensing Regulations. Accordingly, letters were sent to different stakeholders as per the approved list on October 30, 2019, soliciting their comments for assistance of the Authority. (B). Comments of Stakeholders (I). In reply to the above, comments were received from three (03) different stakeholders. These included Central Power Purchasing Agency (Guarantee) Limited (CPPAGL), Lahore Electric Supply Company Limited (LESCO) and Ministry of Science and Technology (MoST). The salient points of the comments offered by the said stakeholders are summarized below: (a). CPPAGL submitted that SBEPL is planning to set up Photo Voltaic (PV) cell based generation facilities consisting of two distinct locations with a cumulative installed capacity of 4.00 MW for supplying/selling at different locations of Military Engineering Services (MES) in Okara and Lahore Cantonment. In light of the provisions of the NEPRA Licensing (Generation) Rules, 2000 (the "Rules"), the Authority is required to scrutinize all applications for the generation licence on "Least Cost Option Criteria (LCOC)". According to the existing tariff structure for the end consumer, the more the number of units being sold, less will be the per unit rate for the fixed capacity charges and vice versa. In the view of foregoing, it is suggested that (a). a quantum for Distributed Generation needs to be ascertained in light of the demand projections (against which agreements/procurements have already taken place) while keeping in view the Energy charge avoided by the Distributed Generation consumers/source against which the capacity charge was supposed to be recovered (as per Page 2 of 15 existing tariff structure of the end consumers); (b). a uniform tariff required to be introduced (in the existing end consumer tariff setting framework) for the Grid Connected Distributed Generator Consumer (be it for Net-Metering or Self-Consumption) by incorporating a new tariff category in the Schedule of Tariff (SOT); (c). a separate Category for Grid-Connected Distribution Generation (be it for Net- Metering or Self-Consumption) needs to be introduced through a Central Planning Mechanism in order to ensure proper registration and charge of respective tariff; (d). The design of the competitive wholesale market i.e. CTBCM has already been submitted by CPPAGL to NEPRA for regulatory approval in March 2018. Unless the design of the competitive wholesale market is approved and the wholesale market become functional, the retail suppliers could not carry out the sales/purchase transactions without any market framework. Therefore, the first prerequisite in this regard is to have an approved model of the competitive wholesale market from the regulator in order to proceed further towards the retail market; (b). LESCO remarked that SBEPL has submitted an application for grant of generation licence in respect of its proposed PV based generation facilities to be located Okara and Lahore Cantonments. SBEPL intends to sell generated electric power from its above mentioned generation facilities to MES. It is pertinent to mention that Garrison Engineering Army Okara Cantonment has two connections of LESCO under tariff C-2b (29) with sanctioned load of 4500 kW each under tariff C-2b. They are already supplying/selling power to Okara Cantonment area. Besides Garrison Engineer Army South, Lahore Cantonment is a Bulk Power consumer (BPC) of LESCO having electricity connection Page 3 of 15 with sanctioned load of 2690 kW under tariff C-2a(28). They are also already supplying/selling power to Lahore Cantonment area. LESCO made reference to letter No. NEPRNSA(CA)/TDC-10/18815-24 dated 03-1 2-2018 vide which DISCO are directed to deliver the Order of the Authority to the entities for regularization of their resale activity within three months and submit compliance report. Whereas above mentioned BPC(s) are involve in resale of power activity but they have not got their activity regularized. That it is neither permissible under the Utility Practices nor any law that a BPC can have two separate electric power connections from two separate, distinct and independent companies I sources at the same time therefore these BPC(s) cannot be allowed to have two independent connections simultaneously from LESCO and the applicant; (c). LESCO further added that it is already on list of Privatization and a check list has been issued by the Ministry of Privatization for the purpose of actions that should not be taken without the prior consent I clearance of the Privatization Commission are inclusive of the following: (a). sale or transfer of licenses, permits etc.; and (b). closing of any line of business. LESCO referred to observations and financial implications raised by CPPAGL in the same nature case for grant of generation license in respect of 1.897 MWp Solar Power Project vide letter No. CPPA-GICTOIDGM(Renewable)/Shams Power/i 2608- 13 dated 13-06-2019. LESCO submitted that CPPAGL has further recommended vide letter No. CPPA- G/2018/CEO/6221-35 dated 26-10-2018 that existing Demand Vs Supply scenario, as placed in the NEPRA (State of Industry Report (SlR-2017), envisages surplus Page 4 of 15 capacity from 2018. Accordingly, NEPRA should review the demand and supply projections before granting any further generation licenses as per existing legal and regulatory framework, thus avoiding concomitant financial implications. Lastly LESCO requested that the above comments must be considered before taking any decision in this regard and SBEPL may not be granted generation license for sale of power to valuable consumer MES; and (d). MoST submitted that installation of 4.00 MW Solar Power Generation Plant at Lahore and Okara Cantonment will result in reduction of power consumption from the grid in the area. Type and model of PV Panels are not mentioned in the notice. Therefore, MoST recommended that the panels should be IEC (International Electrotechnical Commission) and UL (Underwriters Laboratories)